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Thailand: World Supplier of Natural Rubber

The southern part of Thailand has a monsoon climate, which is highly conducive to rubber tree

cultivation. This climate helps Thailands rubber farmers achieve high yields - roughly 1.76 tons

of rubber per hectare and has allowed Thailand to lead the world in natural rubber productionsince 1991. In 2006 alone, over 3 million tons of natural rubber was sourced from Thailand.

These already sizeable production levels are projected to increase 2.2% per annum between 2007

and 2009.

In fact, nearly 90% of Thailands natural rubber production is for export. Over 2,771,673 tons,

or an estimated US$5.41 billion, of natural rubber was exported in 2006. The top five recipients

of Thailands rubber products, in terms of export values for 2006, were: China, Japan, Malaysia,the United States, and South Korea.

Furthermore, the International Rubber Study Group (IRSG) has forecast a 4.4% annual growth

rate for global rubber consumption for the period of 2007 to 2009. This rise in demand will

predominantly originate in the Asia and Pacific region. This region, which accounted for 54% of

the total rubber consumption in 2006, is expected to experience an annual growth of demand for

rubber of 5.9% between 2007 and 2009.

Thailand is optimally located to supply the natural rubber demands of the Asia Pacific region.

The proximity of its production sites to its destination sites allows for the just-in-time delivery

essential for complex rubber products.

Ten percent of all the rubber produced in Thailand is used for domestic consumption. Of this

portion, 65% is processed into value-added goods, such as tires and tubes for motorcycles,

airplanes, cars and bicycles (46-51%), gloves (13-15%), rubber bands (8-10%), and elastic (8-9%). Rubberwood, a renewable resource that presents an attractive alternative to hardwoods

timber, is an increasingly important product in the domestic market as this market raises its

environmental awareness.

http://www.boi.go.th/english/why/rubber_summary.pdf

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Major opportunities for investment exist in the production of value-added rubber products, many

of which are used by the growing domestic automotive industry. The following products present

strong investment opportunities:

Tires and tubes for automobile Piping and tubing tires Gaskets / Seals Gloves Elastic Hoses Condoms Furniture from rubberwood

Another growth market is the developing market and cultivation for organic rubber. There is a

growing demand for organic rubber and Thailand is already a leader in the development of sustainable and environmentally sustainable methods for rubber processing.

Why Thailand?

Abundant resources: Thailand is the largest producer of natural rubber. Location in a high demand region: The Asia and Pacific region has the highest rubber

consumption growth rate.

Research and development: Thailand has higher R&D spending than either Malaysia or

Indonesia.

Enhanced Infrastructure: Thailand has ample water supply and low incidence of power

outages to insure the availability of the resources essential to manufacturing ventures.

Solid transportation and communications infrastructure combine to promote ease of

export.

Free Trade Agreements: Thailand has already negotiated reduced tariffs on rubber

products with China, ASEAN countries, Australia, and New Zealand.

Availability of workforce: Thailands labor is cost-effective relative to that of Malaysia

and Indonesia, but quality is never sacrificed to quantity. Thailand is home to a wealth of

highly skilled personnel, and graduates 80,000 science and engineering students annually.